I have a couple random thoughts that I have been thinking about. None of them are large enough to be an entire post, so I thought I would do a “what I learned” post.
Thinking is hard work. You don’t realize it, but it is. And when the questions get bigger, it becomes even more work. But it is a very “hard to manage” work. If you had lots of tasks to accomplish, you could make a list, buckle down, and crank things out. But really big decisions permeate everything you do. Your brain doesn’t stop processing them because you’ve left the office. It doesn’t start processing because you have set aside a few hours to brainstorm. The thinking happens when it can, and there really isn’t much you can do about it.
Speaking of thinking, I heard an interesting idea the other day. My buddy, Matt—who has forgotten more about the markets and trading then I will ever likely know—and I were talking about the Fed, Treasury debt, and quantitative easing. We arrived at several conclusions. First, the financial markets are rigged against the little guys. It is sad, but true. It becomes critically important, if you are not a wealthy investor or institution, to look at how you hedge your risks.
The second thing we talked about what his idea to solve the debt crisis. It goes something like this:
The Fed is printing money to buy US Treasury debt. The Fed currently owns a significant chunk of the US government debt and is buying more each month. What would happen if the Treasury defaulted on just the debt that the Fed owned? You would instantly solve both the problems that worry most people: that the Fed’s balance sheet is getting too big and that the US government has too much debt. But with the stroke of a pen you could wipe out both of those things. Or if not wipe out, put a large dent into.
It makes you think about the money supply and how esoteric the whole thing is. Look for more on this idea later.